Los Angeles County Metropolitan Transportation Authority

Los Angeles 3rd Regional Investors Conference March 31 – April 1, 2016

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LACMTA Overview

Metro is a multimodal transportation agency

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LACMTA Overview LACMTA serves a large and diverse metropolis • 3rd largest transportation system nationwide • Service area of 1,433 square miles across 88 cities • 1.0 million bus and 334,000 rail passenger average weekday ridership as of Q2 2016 • Over 2,200 clean-air CNG buses • 96 Rail Stations • Provides 450 million rides a year

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LACMTA Overview Expanding through public investment Now in Service

• Goldline Foothill Extension (Pasadena to Azusa) • Opened March 5, 2016 Now in pre-revenue testing

• Expo Line Phase II (Culver City to Santa Monica) • Opening May 20, 2016

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Metro System as of December 2015

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Metro System as of March 2016

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LACMTA Overview Expanding through public investment Now under construction

• Crenshaw/LAX Transit Corridor • Regional Connector • Westside Purple Line Extension (Section I & Section II)

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Transit Projects Underway – Crenshaw/LAX Transit Corridor Project

Crenshaw/ LAX Transit Corridor

Projected Opening Date

2019

Major Funding Sources

$661M Measure R $601M Other Federal, State, Local & Others $546M Measure R TIFIA Loan $250M Proposition A & C

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Transit Projects Underway – Crenshaw/LAX Transit Corridor

Leimert Park Station – Tier 2 strut installation

Exposition/Crenshaw Station – Tunnel Boring Machine – “Harriet”

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Transit Projects Underway – Regional Connector Project

Regional Connector

Projected Opening Date

Major Funding Sources $670M Full Funding Grant Agreement (FFGA) $722M Other Federal, State, Local & Others $160M Measure R TIFIA Loan $7M Measure R

2020

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Transit Projects Underway – Regional Connector

Pre-trenching at 2nd/Spring 10

Transit Projects Underway – Westside Purple Line Extension Section I Project Westside Purple Line Extension Section I

Projected Opening Date

Major Funding Sources $1,250M Full Funding Grant Agreement (FFGA) $ 875M Measure R $ 856M Measure R TIFIA Loan $ 174M Other Federal, State, Local & Others

2023

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Transit Projects Underway – Westside Purple Line Extension Section I

Contractor installing the First Wilshire/La Brea Station Pile 12

Transit Projects Underway – Westside Purple Line Extension Section II Project Westside Purple Line Extension Section II

Projected Major Funding Sources Opening Date 2026

$1,187M Full Funding Grant Agreement (FFGA) (in process) $695M Measure R $307 M TIFIA Loan (in process) $278 M Other Federal, State, Local & Others

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Transit Projects Underway – Westside Purple Line Section II

Line field work completed 14

Highway Projects

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Map Label

Project Type

Description

A

Freeway Improvement and Gap Closures

I-5 North Capacity Enhancements

B

Freeway Improvement and Gap Closures

SR-138 Widening

C

Freeway Improvement and Gap Closures

High Desert Corridor

D

Freeway Improvement and Gap Closures

SR-138 Capacity Enhancements

E

Freeway Improvement and Gap Closures

I-710 Early Action Projects

F

Carpool Lanes

I-405 NB Carpool

G

Carpool Lanes

I-5 Carpool

H

Carpool Lanes

I-10 Carpool

I

Carpool Lanes

I-10 Carpool

J

Carpool Lanes

I-5 Carpool

K

Carpool Lanes

I-5 Carpool Mixed Flow

L

Freeway Interchanges

I-5/Carmenita Rd Interchange

Overview of Credit

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Overview of Credit – Three Local ½ Cent Sales Taxes • Authorized by voter approval • Applies to both incorporated and unincorporated areas of Los Angeles County, including areas not served by LACMTA • All local sales tax revenues are remitted monthly by the State Board of Equalization directly to the bond trustee, who deducts 1/6 interest and 1/12 principal before remitting to LACMTA Indenture

Commencement

Sunset

Allocation % Local/LACMTA

Proposition A

1981

No Sunset

25/75%

Proposition C

1991

No Sunset

20/80%

Measure R

2009

June 30, 2039 (30 Years)

15/85%

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Overview of Credit – Sales Tax Revenue Debt Programs Structural and Policy limits create high minimum coverage levels Proposition A • Effective Additional Bonds Test (“ABT”) of 2.46x Proposition C • ABT in indenture is 1.30x •

Allocation requirements of tax ordinance and long-standing debt policy results in an effective ABT of 2.28x

Measure R • ABT of 2.50x •

Ordinance specifies allocation requirements that further restricts borrowing

System operating requirements also restricts future borrowing

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Overview of Credit – Growing Revenues and Historically High Coverage Ratios

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Overview of Credit – Current Debt Portfolio and Ratings (as of March 1, 2016) Credit

Outstanding Par

Rating (Moody’s/S&P/Fitch)

Prop A – 1st Tier Senior Bonds

$1,052,015,000

Prop A – 2nd Tier Senior Bonds

18,145,000

Aa2/AA/NR

1,159,800,000

Aa2/AA+/AA

Measure R – Senior Bonds

669,420,000

Aa1/AAA/NR

Measure R – TIFIA Loans(1)(2)

363,909,754

NR/A-/A

General Revenue Bonds

113,405,000

Aa2/AA/NR

Short-Term Obligations

258,124,000

Prop C – Senior Bonds

Outstanding Debt

Aa1/AAA/NR

$3,634,818,754

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General Revenue Bonds received a two notch upgrade by Moody’s on November 3, 2015

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All other long-term outstanding debt received a one notch upgrade by Moody’s on November 3, 2015

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General Revenue Bonds received a two notch upgrade by Standard & Poor’s on November 4, 2015 (1)TIFIA outstanding par amount only includes proceeds drawn to date on the Crenshaw Project; Amount does not reflect capitalized interest due to deferred debt service payments or total committed TIFIA funds to date of $545.9M for the Crenshaw Project, $160M for the Regional Connector Project, and $856M for the Westside Purple Line extension Section 1 Project. (2)TIFIA Loan relating to the Crenshaw Project is rated by S&P A- ; TIFIA Loans relating to the Westside Purple Line Extension Section 1 and Regional Connector Projects rated by S&P and Fitch as shown.

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Overview of Credit – Short-term Debt Programs by Indenture Short-Term Borrowing Proposition A Program

Proposition C Program

Measure R Program

Total

$200,000,000(1)

$150,000,000

$300,000,000

$650,000,000

Outstanding Par (3/1/2016)

$62,500,000

$63,624,000

$132,000,000

$258,124,000

Issuance Date

03/08/2016

03/29/2016(2)

11/01/2015

Expiration

03/07/2019

03/28/2019(2)

11/20/2020(2)

Sumitomo MUFG Union Bank

Bank of America Wells Fargo

Bank of the West State Street RBC Capital Markets

Program Capacity

Liquidity Provider(3)

(1)Proposition

A program currently is authorized to issue $350 million in short term obligations. Bank of America letter of credit agreement is scheduled to close on April 6, 2016 with an expiration date of April 5, 2019. The RBC short term obligation will expire on November 23,2020. (3)The Sumitomo, MUFG Union Bank and Bank of America short term obligations are structured as letters of credit. Wells Fargo, Bank of the West and State Street agreements are structured as revolving credit agreements. RBC Capital Markets short term obligations are structured as draw down bonds. (2)The

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Overview of Credit – Current TIFIA Loans approved and outstanding • Crenshaw Project – 2.43% closed on 9/20/2012 • Regional Connector – 3.50% closed on 2/20/2014 • Westside Purple Line Extension Section I – 3.23% closed on 5/21/2014 TIFIA Loans Outstanding Loan (As of 3/1/2016) Amount

Project

Principal Payments Begin

Final Maturity

Crenshaw

$363.9

$545.9 FY 2022

FY 2034

Regional Connector

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160.0 FY 2020

FY 2036

856.0 FY 2020 $363.9 $1,561.9

FY 2037

Westside Section I Total

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Overview of Credit – General Revenue Bonds • Secured by a pledge of farebox revenues, fees and advertising revenues – –

Further secured by remaining Proposition A & C sales tax To date, all debt service has been paid from farebox revenues

• Fixed out the 2004 variable rate General Revenue Bonds in December 2015 • As of March 1, 2016, $113.4 million of outstanding General Revenue Bonds • The lien related to the General Revenue Bonds is closed – –

Two notch rating upgrade from “A+” to “AA” by S&P Two notch rating upgrade from “A1” to “Aa2” by Moody’s

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Recent and Future Debt Activity

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Recent and Future Debt Activity Recent Transactions •

Proposition A 2016-A Refunding –

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Fixed out the remaining variable rate debt eliminating interest rate risk

Prop A & C Short Term Borrowing

Current Long-term Debt Issuance Projections FY2016-20 ($ millions) Proposition A

$724

Future Debt Issuance Plans

Proposition C

1,374

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Measure R(1)

382

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Extending programs through 2019

Economic refunding of Proposition C Series 2006-A bonds – –

Current Refunding planned for May 2016 $112.7 million to be refunded

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Approximately $307 million TIFIA Loan for the Westside Purple Line Extension Section II Project

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Transit and Highway Projects FY2016-20 (1)Measure

R does not include TIFIA Loans.

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Total

$2,480

LACMTA is distinguished by Fundamental Credit Strengths

Essential Program and Strong Mandate

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Provide transportation is a key component for continued regional growth and quality of life Multi-modal strategy enables Metro to meet the diverse needs of the region

Management Strengths

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Difficult decisions made: Fare increase in September 2014 Healthy portfolio of completed projects

Strong Security Features

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The Sales Tax behind each program has been proven stable and resilient Strong ABT and Trustee intercept High historical and projected debt service coverage Terminated all interest rate swaps; all long-term variable rate debt has been fixed out

Diverse Economic Base

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Los Angeles County is a leader in the Trade, Communications, and Finance Industries Comprehensive and varied tax base

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Standard & Poor’s Rating of AAA (Prop A and Measure R) & AA+ (Prop C) Moody’s Investors rating of Aa1 (Prop A and Measure R) and Aa2 (Prop C) Fitch Rating of AA (Prop C)

Recognition by Rating Agencies of Fundamental Credit Strength

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Questions? Donna R. Mills – Treasurer [email protected] 213-922-4047 LuAnne Edwards Schurtz – Assistant Treasurer [email protected] 213-922-2554

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